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PAdealing
PAdealing is the execution-only share dealing service offered by Fyshe Horton Finney Ltd, with online trading from £10 per trade and telephone dealing from £23.50 per trade.
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Panel on Takeovers and Mergers (POTAM)
A non-statutory body comprising City institutions which regulates takeover activities.
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Par
One hundred percent of the principal amount of a debt instrument, or the nominal price of a share or other security.
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Par Bond
A security or financial instrument that is bought and sold at its face value, rather than at a discount or premium.
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Par Yield
The yield on a hypothetical bond, the price of which stands at par.
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Par Yield Curve
A yield curve where the yields plotted are par yields.
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Pari Passu
Equal in all respects (Latin). A corporate action in which a line of stock is issued by a company which is identical to the existing class of security (except perhaps that it does not qualify for a recent dividend or has some other restriction).
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Parity
In an exchange market, when all brokers bidding for the same security have equal standing due to identical bids.
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Permanent Interest Bearing Shares (PIBS)
These are Building Society shares, listed and traded on the Stock Exchange, paying a fixed rate of interest at regular intervals, normally in perpetuity. They carry risks associated with fixed-interest securities, being the last to be paid out should the issuing Building Society be placed in liquidation.
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Perpetual Bond
A bond which has no maturity date.
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Personal Equity Plan (PEP)
An investment plan managed by a plan manager, approved by the Revenue, and managed in accordance with PEP regulations. PEPs are now discontinued.
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Personal Member Account
A Crest account to facilitate the delivery of securities in electronic (book entry transfer) form. The shareholder remains the legal owner of the shares although he has no direct link to Crest. This is provided by the sponsoring member firm of Crest. This type of account has distinct advantages over holding share certificates, which can be lost and usually attracts higher transaction charges.
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Placing
One of the methods by which companies issue new shares. The issuing company allocates the shares to a broker or brokers who then market the shares to their respective client bases. It is by far the cheapest way for a company to issue new shares. It is sometimes referred to as Selective Marketing.
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Point
Used to quote securities prices. For a bond, one point equals £1 per £100 nominal. For a preference share, one point equals one penny.
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Portfolio
A group of holdings/investments pertaining to an investor or institution.
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Power of Attorney
The legal authority for one party to sign for, and act on behalf of another party.
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Preference Shares
Shares that have preference over ordinary shares in respect of dividends up to certain limits. Similarly, preference will normally be given for repayment of capital in a winding up. Preference shares, like ordinary shares but unlike debentures, normally carry some degree of ownership of the company. In the event of liquidation however they are paid off after debt capital but before ordinary capital.
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Premium
The price that an option buyer pays and a writer receives when trading an option.
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Premium (Options)
The price paid by a buyer of an option contract to the seller for the right to exercise.
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Price Swing
A fluctuation in the value of an asset, liability or account. This term is most commonly used when referring to a situation in which the price of an asset experiences a significant change over a short period.
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Price/earnings Ratio (P/E Ratio)
The P/E ratio can be a useful tool for investors when assessing the value of a share. The ratio is calculated as follows:-
P/E ratio = Current Share price / Earnings per share
The ratio expresses how many times last year's earnings are represented in the share price. For instance a company with a P/E of 8 will have a share price 8 times last year's earnings.
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Primary Market
The new issue market. The function of bringing new securities to the market.
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Principal Trading
When a member firm of the London Stock Exchange buys stock from or sells stock to a non-member.
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Privatisation
The transfer of state owned industries from public to private ownership. Privatisation was popularised by successive conservative governments during the 1980s and 1990s
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Probate
The legal process in which a will is reviewed to determine whether it is valid and authentic. Probate also refers to the general administering of a deceased person's will or the estate of a deceased person without a will. The court appoints either an executor named in the will (or an administrator if there is no will) to administer the process of collecting the assets of the deceased person, paying any liabilities remaining on the person's estate and finally distributing the assets of the estate to beneficiaries named in the will or determined as such by the executor.
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Prospectus
A document providing details of a forthcoming share issue.
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Proxy
A person appointed to vote at company meetings on behalf of a shareholder.
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Public Company
A company that has issued securities through an initial public offering (IPO) and is traded on at least one stock exchange or in the over the counter market. Although a small percentage of shares may be initially "floated" to the public, the act of becoming a public company allows the market to determine the value of the entire company through daily trading.
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Public Limit Order Board (PLOB)
A facility administered by LlFFE whereby private client orders which cannot be traded immediately may be left on the Board to be traded if the limit price is met at any time during the trading day.
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Put Option (Bond)
This refers to a feature which gives the holder the right to demand repayment before maturity at a pre¬determined price.
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Put Option (LIFFE)
A contract conferring the right but not the obligation to sell an agreed amount of an underlying asset within a specified time at a specified price.